January 9, 1986

Treasury bond yields rose sharply yesterday, after the December employment data showed that the economy is entering the new year on a firm footing, and does not need any extra stimulus from an easier Federal Reserve monetary policy. By late in the day, the Treasury's bellwether 9 7/8 percent bonds due in 2015 had lost 1 5/8 points, or $16.25 per thousand dollar bond, and were offered at 105 18/32, for a 9.32 percent yield. Treasury bill rates rose sharply, with the three-month issue quoted at 7.20 percent, up from 7.04 percent. Without a Fed move to reduce short-term interest rates, analysts said, yields for longer-term notes and bonds would have to increase, in order to attract investors and compensate them for the extra risk of longer maturities.

Peter F. Vallone, the new majority leader of the City Council, promises an independent future for the city's long-complacent legislature. He wants more staff members for the Council, stronger committees, more to say about the city budget. But in interviews yesterday after his victory by a margin of one vote, the 51-year-old lawmaker from Queens also emphasized his general agreement with the Mayor and his desire for peace and consensus on the Council. Mr. Vallone had the Mayor's support, and he won thanks to furious maneuvering by the Democratic county leaders of the Bronx and Queens. He also managed the near impossible: to insulate himself from that political process, insisting time and again that he would not trade Council committee chairmanships for votes.

The Eastman Kodak Company lost its battle yesterday to remain in the instant photography business. Justice Lewis F. Powell of the Supreme Court denied Kodak's last-minute appeal for a stay of an injunction that orders Kodak out of the business by today. Hours earlier, a Federal appeals court panel denied Kodak's request to lift the injunction. The injunction was issued by Federal Judge Rya Zobel in Boston in October and was to go into effect today.

A report in New York Day by Day on Dec. 18 about a kitchen fire at the Cafe des Artistes misidentified the painter of the restaurant's murals. He was Howard Chandler Christy.

President Reagan's 1987 budget is likely to propose that private investors be sold a slice of the $245 billion portfolio of Government loans, according to Administration officials. Proceeds would be a step in the effort to reduce the Federal deficit, and the sales would be in line with the President's desire to reduce the size of the Government. The sales would be small, probably no more than $2 billion to $3 billion in the first year, officials said in recent interviews, but they could grow substantially in subsequent years. ''I think that will be a theme in the budget,'' said a senior economic policy official who asked not to be identified.